Samsung Electronics Hits Record Profits as AI Chip Boom Drives Semiconductor Super Cycle

Samsung Electronics has posted unprecedented earnings as surging demand for artificial intelligence (AI) semiconductors drives the company into a new “super cycle” in the global chip industry.

The company announced on April 7 that it recorded 133 trillion won in revenue and 57.2 trillion won in operating profit for the first quarter. The results mark the highest quarterly performance in its history and come close to its previous annual record operating profit of 58.89 trillion won set in 2018.

The sharp rise in earnings was largely driven by Samsung’s memory semiconductor business. Industry estimates suggest that the semiconductor division alone generated around 50 trillion won in operating profit, with DRAM accounting for more than 41 trillion won.

The rapid expansion of AI data centers has significantly boosted demand for high-value memory products, including high-bandwidth memory (HBM), leading to simultaneous increases in both prices and shipment volumes.

Samsung’s next-generation HBM4, which the company has begun mass production of ahead of competitors, is considered a critical component for AI computing performance and has contributed to improved profitability. As the company shifts from commodity memory products to high-performance, high-margin solutions, its profit leverage has strengthened.

Market research firm TrendForce reported that DRAM prices rose by as much as 95% quarter-on-quarter in the first quarter, with an additional increase of around 60% expected in the second quarter. On an annual basis, prices could rise by up to 250% compared to last year. NAND flash prices are also rebounding alongside improving market conditions.

Structural changes in demand are also becoming evident. As the AI industry transitions from training-focused workloads to inference-driven operations, data processing volumes have surged, increasing memory requirements per server. Analysts estimate that major AI data center operators now account for roughly 60% of Samsung’s DRAM and NAND shipments.

A weaker Korean won has further supported earnings growth. Given that a significant portion of semiconductor sales is denominated in U.S. dollars, the rise in the won-dollar exchange rate has translated into higher profits in local currency terms, amplifying operating leverage.

Brokerages have been revising upward their forecasts for Samsung’s full-year performance. Annual operating profit projections, previously estimated at around 200 trillion won, have now been raised to over 300 trillion won. Some analysts also suggest that quarterly operating profit could surpass 100 trillion won in the fourth quarter.

If the current momentum continues, Samsung could narrow its gap with Nvidia, which is currently regarded as the global leader in operating profit. Some market observers believe Samsung may even surpass Nvidia next year to become the world’s most profitable company.

However, there are also cautious views on the sustainability of the current boom. The memory industry is inherently cyclical, and increased supply could lead to price volatility. Potential global economic slowdowns or adjustments in AI investment could also pose risks.

Despite these uncertainties, many analysts believe that investment in AI infrastructure has entered a structural growth phase, suggesting that the current cycle could last longer than previous semiconductor upcycles.

Samsung Electronics is increasingly being viewed as a core infrastructure provider in the AI era, with both its financial performance and corporate value on an upward trajectory. The company’s ability to maintain competitiveness in high-value memory such as HBM, along with expansion in foundry and system semiconductor businesses, is expected to be a key factor in its long-term growth.